the weight of print
TRANSCRIPT
The weight of printIn the invoicing balance
Sébastien HouzéPostEurop Market Manager
EC Meeting, 31 May 2011, Brussels
a quick view on the postal sector
1
PostEurop
50 European Public Postal
Operators
Linking 800m people daily
Retail services – 175,000
counters
Employing 2.1 million
people
Telcoms & E Print & Paper
Key differences
Growing market Declining core market & competition with other
media Residential revenue concentration Business revenue concentration
Capital intensive Labour intensive
Out of Europe production European Production Based
Other differences, Post in focus
Easier capacity extension Extension limited by human factor
Retail/wholesale No mandatory access
Trans-national - EU top down Strong subsidiarity
USO as start in the « ladder » USO as main business
Renewed liberalisation discussion Liberalisation 2011 but yet inter-modal competition
Comparison Telcoms and E – Print and paper
Business is sendingConsumers are receiving
From/To BusinessConsumersTotal
Business31 % 57 % 88 %
Consumers 6 % 6 % 12 %
Total37 % 63 % 100 %
the context
-Declining core market and true competition
-Diversity of situations
2
Declining core market & true competition
More E-substitution to come
100
120
140
160
180
200
95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12
E-substitution:Unstructured doc. to email
GDP (inflation incl. – Base 100 = 1995)
Post Domestic Mail revenue (Base 100 = 1995)
Sources: Annual Financial Report of The Post SA 1993 – 2007, Strategic Plan forecasts, BNB, Federal Office of Plan, Ministry of Economic Affairs
Start of the law legalizing e-Registered Mail
Acceleration of e-Invoicing adoption mainly in B2B sector
Domestic Addressed Mail Revenue vs. GDP (at market prices)(Domestic Mail Revenue without Invoice to the State)
Declining core market & true competition
More recent years show a sharper decline for most Western EU PPOs
Growth
Strong decline
Slight decline (< 1%)
Flat
Domestic Mail
CAGR 2004-2007
Source: PostEurop data, UPU & Annual reports
Declining core market & true competition
More recent years show a sharper decrease: TNT example
• Source: TNT annual report 2008 (p. 43)
Declining core market & true competition
… with fierce competition in large communication market
TV; 35,4%
Dailies; 20,8%
Radio; 10,2%
Magazines; 8,0%
Postering; 7,0%
Free Press; 4,3%
Internet; 3,6%Cinema; 0,7%
DM as fourth medium
with
a media share of
9,9 % but a strong ROI
Year 2009 2009
Direct mail : 9,9 %
Sources Gross Media InvestmentsDM: DM pige (Mediaxim); other media: CIM-MDB (Mediaxim)
Belgium
Diversity of situations
Mail dependency – Revenue Composition (2008)
Source: IPC, 2009
12
Sources: Study EC - ITA Consulting, WIK , info postal operators
Diversity of situations Fixed costs (personnel costs)…
79%
73%71%
69% 68%67% 65% 64% 63% 62% 61% 60% 59%
57%54% 53% 52%
48% 46% 45%
39%37%
35%
29%
0,0%
10,0%
20,0%
30,0%
40,0%
50,0%
60,0%
70,0%
80,0%
90,0%
GR IE ES CZ BE SI GB DK FR BG HU EE LT MT PT SK LV AT FI SE LU IT NL DE
Personnel cost (2008*)(Staff cost/ total cost)
* CZ, BG, HU, EE, LV,LU, SI, ES date 2007, SK date 2006
ESTIMATES
13
Diversity of situations
Addressed mail volume per capita
ESTIMATES
233030
50545658
84869798100106110
139
154
206
236238
279289305
326327342346
396
0
50
100
150
200
250
300
350
400
450
FI SE NL LU GB AT FR DK DE BE SI IE ES PT MT SK HU IT EE CZ CY GR LV PL LT RO BG
Domestic Addressed Mail volume per inhabitant p.a. (2007)*
* AT & BE data 2008 Sources: Study EC - ITA Consulting, WIK , info postal operators
Average 169
14
Labour Cost Ratio* (%)94
9087 86 85 83 83 83 82 81 80 79 79 78 78 78 77 77 77
74 73 7269 68 68
0
10
20
30
40
50
60
70
80
90
100
DK IE SI LU PL PT UK LV MT LT HU NL DE AT EE SK ES FI CZ SE FR IT GR CY BE
*Defined as labour cost for a self-employed workerdivided by labour costs if worker were an employee
Sources: PWC report, May 2006 on ‘Postal Internal Market’
Diversity of situations Difference between self-employed and employees…
Diversity of situations Internet: an alternative?
http://ec.europa.eu/information_society/policy/ecomm/doc/implementation_enforcement/annualreports/15threport/comm_en.pdf
more EU regulatory initiatives impacting the postal operators
3
Some concrete examples…
European regulators group for post/ERGP (DG Markt)
State aid & services of general economic interest (DG Competition)
Combating late payment (DG Enterprise)
Digital agenda (DG Infso)
E-commerce (DG Markt)
Aviation security (DG Mobility & Transport)
VAT (DG Taxud)
E-invoicing (DG Taxud)
Modernised Customs Code (DG TAXUD)
Postal & courier – GATS (DG Trade, WTO)
Data protection (DG Justice)
• Fixed Cost• Fixed Prices
• Integrated
• Variable Cost• Demand-
driven Pricing• Structurally Separated
• Letters with some Parcels
• Parcels with some Letters
• Innovation• Go-it-alone
• Fast Imitation• Co-create
and Partner
Flexibility
Predominant Network
Ambition Focus
• Internationalized
• Full Service
• Geographically Focused• Best Service
Collaboration
• More Volume, Less Value• Most Value to Senders• Physical
• Less Volume, More Value• More Value to Recipients• Hybrid
Core Value Provided
• Traditional Core• Social Mission• Generate Information
• Diversified• Commercial
Mission• Own Information
Core Mission
1
2
3
4
5
6
Our strategy
Listen to the customer : sender
and receiver
Rebalance the communication
business, from sender benefits
to recipient value 4
Cost Price Integrated
Letters NetworkInternational
Full Service
Innovation
Partnering
Core/Diversified
Social/Commercial
Info Ownership
Volume &Value
Sender/Recipient
Physical/Hybrid
Do not disturb?
We are changing…
Changing our Core…
• More Volume, Less Value• Most Value to Senders• Physical
• Less Volume, More Value• More Value to Recipients• Hybrid
TO
The graphical value chain
5
United we stand
53+
sectors covering entire value chain
million people employed
To cope with 3 immediate challenges
Structurally
Substitution by electronic media
Sustainability misconceptions
Cyclically
Recession-based budget cuts
The misconceptions
6
Do you have the global picture?
The mass adoption of e-invoicing within the EU would lead to significant economic benefits and it is estimated that moving from paper to e-invoices will generate savings of around EUR 240 billion over a six-year period[5]. Furthermore, due to the close link between invoicing and payment processes, the creation of the Single Euro Payments Area (SEPA) offers a launch pad for interoperable European e-invoicing schemes.
The Commission wants to see e-invoicing become the predominant method of invoicing by 2020 in Europe. The Commission is committed to working in close cooperation with the Member States and all other stakeholders who will need to play their part to achieve this target and create the right environment for the widespread deployment of e-invoicing.
Accordingly, this Communication addresses the following priorities:- to ensure legal certainty and a clear technical environment for e-invoices to facilitate mass adoption- to encourage and promote the development of open and interoperable e-invoicing solutions based on a common standard, paying particular attention to the needs of SMEs- to support the uptake of e-invoicing by setting up organisational structures, such as national e-Invoicing fora and a European Multi-Stakeholder Forum.
COM(2010) 712 finalCOMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONSReaping the benefits of electronic invoicing for Europe
Do you have the correct image?BENEFITS FROM ELECTRONIC INVOICINGUnlike paper-based invoices, e-invoices provide all data in digital format. Such e-invoicing offers substantial benefits over paper invoicing. It allows for shorter payment delays, fewer errors, reduced printing and postage costs and, most importantly, fully integrated processing. One distinctive feature of the e-invoice is therefore its potential for automation, especially if the invoice is sent in a structured format: e-invoices can be generated and transferred automatically and directly from the issuer’s or service provider’s financial supply chain systems to those of the recipient. Most of the economic benefits therefore do not arise from savings in printing and postage costs but rather from the full process automation and integration from order to payment between trading parties.Furthermore, applying equal VAT rules on electronic and paper invoices is expected to reduce administrative burden on enterprises by up to a maximum of EUR 18 billion in the medium term as pointed out by the High Level Group on Administrative Burden[6].
Benefits from e-invoicing are also expected to affect consumers, in particular with regard to the convenience aspects of e-invoices in comparison with paper invoices. It should however be ensured that consumers with limited or no access to the internet should not be left behind and that consumers should always be allowed to ask for a paper invoice. In addition and in accordance with the EU Charter on Fundamental rights, e-invoicing should comply with the protection of personal data and the right of private life.
Finally, the environmental benefits of e-invoicing in terms of reducing paper consumption and energy costs for transportation are also significant, generating carbon savings which could amount to reductions in CO2 emissions of 1 million tonnes per annum[7] for the EU.
Two industries, two worlds…
7
E-billing to save the trees and the earth?
http://www.digi.com http://www.greencitizens.net http://www.timewarnercable.com
E-billing to save the trees and the earth?
And the consumer?
38.000 trees en 1512 tons C02 economy
And the consumer?
And the consumer?
A lot of customers say
that they are not happy
with the fact that their
provider decide for them
to send their invoice via
e-mail...
“NOT ASKED and NOT
DESIRED”
Source: Het Laatste Nieuws 02/12/2010
0
50
100
150
200
250
300
350
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Bill
ions
em
ails
/day
Year
World email and spam traffic 2001-2010 Total emails send/day in bilions Total spam/day in bilions
Dematerialization «From atoms to bits»? 1995 - MIT professor Nicolas Negroponte
Sources: Radicati Group, 2010; Mcafee, 2009; UPU, 2009
0
0,3
0,6
0,9
1,2
1,5
1,8
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Bill
ion p
ost
lett
ers
/day
Year
World postletter traffic 2000-2009 Total of postletters per day in billions
Number of emails/day has increased dramatically over the last 10 years, but the number of post letters has only slightly decreased
ICT and PAPER usage
Sources: 1CEPI, 2010; 2Arnfalk, 2010
Production of paper & board in CEPI countries, quarterly trend
2000 - 20101
Conclusion2:
• Relatively small substitute effect
• Large complementary and generational effect
Sources: 1UNEP, 2010; 2Umicore, 2007; 3CSIRO, 2007
Rare materials Modern electronics contain up to 60 different elements1
800 laptops contain up to 1 kg of gold2
Intensive chemical refinement of materials
Water usage250.000 M3 water is used for 1 tonne of gold3
TOX
GHG
BIO
TOX
Impact on resource extraction
Logging of mature virgin forests 56% of all woodsources in EU are PEFC and FSC certified1
Homogeneous replanting for logging
Source: 1 CEPI, 2009
Impact on resource extraction
BIOBIO
GHGBIO
Recycled paper
40
Virgin fiber 60%
In Europe, only 15% of paper “raw material” comes from specific “thinning” (cutting of trees)
25% Waste of forest industry
50% Sanitary “thining”
25%Specific “thinning”
15% (= 25% of 60%) of paper “raw material” comes from specific “thinning”
25% of these virgin fibers comes from specific “thinning”
60% of paper production is made of “virgin” fiber
“Use of paper” DOES NOT mean “forest destruction”
Even environmentalist say that there is nothing wrong in using timber
(large or small trees) for paper production, provided the forest is managed in a sustainable way
Source: 1Williams, 2004
Energy intense complex production81% of life cycle energy use during production phase1
Chemical treatment
GHG
TOX
Impact on production
Impact on production
Production of pulp & paperCO2 emissions have decreased by 42% per tonne of paper pulp since 19901
BleachingCOD used has decreased by 76.3% since 19901
Water usage
GHG
TOX
GHG
TOXTOX
TOX
Continuous energy use ICT GHG emissions are 2% of global total1
Global data centres GHG emissions comparable with those of The Netherlands2
GHG
Sources: 1Gartner, 2007; 2McKinsey & Co, 2008
Impact on usage
Transport430 billion mail items send in 20091
Source: 1Arnfalk, 2010
GHG
Impact on usage
A non polluting ICT vs a polluting paper industry?
Printers; 6%
PCs and Monitors (excluding embodied
energy); 39%
Servers (including
cooling); 23%
Fixed-ine telecoms; 15%
Mobile telecoms; 9%
Produits postaux traditionnels;
63%
Source: Gartner – IT Vendors, Service Providers and Users Can Lighten IT’s Environmental Footprint,
December 2007
IT carbon emission breakdown
ICT sector’s current share of world
greenhouse gas is 2% and it is expected to
more than double by 2020
52% of the total energy used in the
industry is biomass-based and the sector
is responsible for 27% of the total
production of biomass-based energy in
the EU
Impact on waste
LandfillOnly 15% of global E-waste is recycled1
Yearly E-waste increase: 40 million tonner/year2 BIOTOX
Quickly obsoleteIncreasing life span of phone from1 to 4 years decreases environmental impact with 40%3
BIOTOXGHG
Sources: 1Pike Research, 2010; 2UNEP, 2010; 3Umicure, 2007
Source: 1CEPI, 2009
LandfillPaper recycling rate in EU 2009: 72,2%1
Impact on waste
GHGHGG
Comparing life cycles
2010 Sustainability Challenges
ICT and paper: linear versus circular system
15% 72%
Mail and E mail Carbon Meter
Results from Carbon Meter and studies
Carbon emissions from paper mail: 9 grams/paper DM
Carbon emissions from email (1,52 Min): (30 sec): (15 sec):
5,6 grams/email DM5,0 grams/email DM4,8 grams/email DM
Simulating the effect of sending physical mail and email
C02 EMISSION:
1 Letter mail = 2,0 times email
But…volumes are not the same !
Worldwide1:
430 billions paper mail
60.000 billions e mails (SPAM
included)
Source: 1 Arnfalk, 2010
SPAM effect
Global CO2
email traffic
up to 20 times post letter traffic1
Source: 1 Arnfalk, 2010
BUT… !!!
The electronic / graphical global picture
European based industry, from Europeans to Europeans
360° production system: from sourcing to production, from production to recycling, from recycling to production
Complete master of ressources and energy
Investments in Europe, from Europe
A responsible industry, framed by certifications ( ISO, EMAS, FSC, PEFC, Carbon Neutral, … )
Regulated business
Non European based industry, from outside to Europeans
No 360° production system: no recycling process, production conditions uncertained
No master of ressources ( Silicium? ) and energy ( nuclear? )
Investments outside Europe
No certifications
No regulations
Cloud computing, production, data centers, call centers…
Sure?
2010 Sustainability Challenges
The paper values
8
Paper is the preferred channel
Preferred media channel for relational communication
P and e are complementary
P and e are complementary
Don’t underestimate paper please…
Don’t underestimate paper please…
Don’t understimate paper please…
Don’t understimate paper please…
Don’t understimate paper please…
Don’t underestimate paper please…
The time for synergy
9
We add value to paper and prove the synergies with electronic
We foster paper mail by promoting innovation in general and by creating the bridge between paper and electronic
http://www.printpower.eu/mailing
Our propositions
10
We make a wish…
A fair view on the two media values with
advantages and inconvenients
Promotion of the advantages of the synergy of
both media utilized together
A review of figures based on sender AND
recipients impacts and including consumer rights
protection
A complimentary study on IT dependance for
households and the cost impact of it
Association of European Public Postal Operators AISBLAssociation des Opérateurs Postaux Publics Européens AISBL
www.posteurop.org
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